6 Trends Altering the Insurance Landscape
June 27, 2016 11:34 AM
6 Trends Altering the Insurance Landscape
Emerging technologies and a renewed interest in long-term care are fueling innovation in the insurance industry, according to Aite Group.
Zenefits Triggers an Arms Race
The HR tech startup is following the blueprint of E*TRADE Financial in securities and Ally Bank in banking, says Aite Group Senior Analyst Mike Trilli. All three models promote online self-servicing in industries where manual-intensive paper enrollment processes were once the norm, Trilli says. This model is triggering a health insurance arms race, forcing brokers, agents and benefit administration companies to protect erosion in their small-business market share, taking notice of how their software is packaged and priced as well as protecting against a broker exodus to Zenefits.
More Investments in Insurance Technology
There will be an increased investment in insurance technology, with startups leveraging technology to provide new solutions to the insurance industry and seeking to disrupt insurance incumbents, including brokers, says Gwenn Bezard, co-founder and research director at Aite Group. Entrepreneurs are looking for opportunities to disrupt the broader insurance industry. They are coming from the insurance industry as a new generation of insurance practitioners in their mid-30s and 40s gets ready to leave the comforts of big firms to start new ventures, he says. They are coming from outside the industry, too, as a range of very young to experienced tech entrepreneurs spot the green pastures of insurance.
Health Systems Take on Health Insurers
Instead of fighting the Affordable care Act, more health systems will leverage the laws push toward recognizing consumers purchase insurance through state and federal exchanges, Trilli believes. This 2016 trend opens opportunity and competition among vendors providing data analytics, quality and reimbursement solutions, he says.
Long-Term Care Insurance Makes a Comeback
A topic of conversation for several years, the low interest rates plaguing the industry and the need to raise premiums once rendered long-term care insurance too expensive for most consumers, says Aite Senior Analyst Samantha Chow. That caused many insurers to get out of the market entirely, while others chose to hibernate for a while and look for new and creative ways to prevail in such a disrupted market, she says. Insurance companies, both those that have been hibernating and new entrants, will begin to return to long-term care insurance over the next 12 months. They will add new products, as well, such as individual, group, hybrid, combination (life and annuities) and even direct response, Chow adds.
Insurers Accelerate the Internet of Things
While the society at large is just learning about the impact the Internet of Things will have on our economy and daily life, some in the tech and insurance industries are looking at the insurance vertical as an ideal consumer of IoT data, Bezard says. The proliferation of smartphones is helping to set the stage for the IoT, he says. More insurers are setting their sights on
connected health and life.For more information regarding these trends, please visit the Aite Group site.